With more than one million page views and more than 4,000 items, this blog provides news and commentary on public policy, business and economic issues related to the $3 billion California stem cell agency, officially known as the California Institute for Regenerative Medicine(CIRM). David Jensen, a retired California newsman, has published this blog since January 2005. His email address is djensen@californiastemcellreport.com.

Tuesday, July 29, 2014

The revolving door and related
conflict of interest issues remain open at the $3 billion California stem cell
agency despite the pledge by its new president, Randy Mills, to refrain from
taking a job with a recipient of the agency’s largess for at least a year after
he leaves.

Mills’ action last week came in
response to the controversial appointment of the agency’s previous president,
Alan Trounson, to the board of StemCells, Inc.(SCI), just seven days after he left the agency. The firm was awarded $19.3 million while
Trounson was its top executive. Last year, members of the SCI board
received as much as $99,000 in stock and cash.

Mills’ move applied only to himself
and excluded other members of the agency’s staff. He said they should not be
denied the ability to seek employment with businesses or research organizations
that the agency has funded.

John M.
Simpson of Consumer Watchdog of Santa Monica, Ca., said,

"The high profile Trounson
Affair focuses attention on CIRM’s potential revolving door problem that
the agency needs to deal with. Randy Mills' pledge not to take a job with
a company funded by the agency for at least a year after leaving is a good
step. There should be such a formal policy covering all employees. “Serious thought should also be
given to the implications of employees leaving for jobs with non-profit
entities that CIRM has funded and what safeguards are necessary.”

State laws do exist to deal with revolving
door situations, but some consider them weak. (See here for an explanation of
the laws.) Trounson’s appointment is an example of the circumscribed nature of
the laws. Mills said the agency's “severely” limited investigation into the
appointment did not show any illegal activities. Simpson said a more rigorous, independent investigation was needed.

Mills’ move did send a clear message
about his own views on some ethical matters and set a tone that should be
helpful at the agency. Some employees might also view it as an example to
emulate.

Playing a role in the revolving door concerns is the financial future of the agency. It is facing its effective
financial demise in 2017 when funds for new awards are scheduled to run out, according
to longstanding calculations by the agency itself. Last week Mills cast that financial picture
in a more optimistic light. (The California Stem Cell Report will have more on
his analysis in the next few days.)

Nonetheless, as the money runs out
and there is no assured refinancing in sight, some employees are naturally
going to be considering other employment. Three employees have departed or
announced they are leaving since Mills was named. The move of Natalie DeWitt,
who was a top aide to Trounson, was already reported by the California Stem
Cell Report. DeWitt went to work for researchers at Stanford who have received about $5 million from the stem cell agency.

Elona Baum, general counsel and vice
president for business development , this month left her $298,000-a-year job to take a position at
Coherus Biosciences of Redwood City. The company yesterday refused to disclose her
job title or whether she had already started work. Kevin McCormack, senior
director for public communication for the agency, said he did not know her job
title. He said the company “has no funding from us or any other
business with us.”

The third employee scheduled to leave is Celeste
Heidler, financial services officer. McCormack said she is retiring. The agency
has posted an opening for her position.

McCormack said it has not been determined whether Baum’s
position will be filled. In addition to
legal matters, she played an important role in relations with the biotech and
stem cell industry.

Consumer Watchdog’s
Simpson said more needs to be done to clear the air concerning the
Trounson appointment.

In response to a query, he said,

“There must also be a deeper probe
into Trounson’s relationship with StemCells Inc, and it its executives and
directors. Margaret Prinzing’s report, a small step in the right
direction, only looked back as far as May 1. Trounson’s relationship with
StemCells Inc. since at least the beginning of 2012 should be examined and the
investigation should be conducted by an entity not as closely tied to the
agency as the Remcho, Johansen & Purcell firm. I think the Citizens
Financial Accountability Oversight Committee, chaired by the state controller
would do a good job."

The committee is the only state
entity charged with oversight of the stem cell agency. The governor and
legislature have no legal ability to control its operations since it was
created by a ballot initiative that specifically spelled out that they had no
role.

About Me

The California Stem Cell Report is the only nongovernmental website devoted solely to the $3 billion California stem cell agency. The report is published by David Jensen, who worked for 22 years for The Sacramento Bee in a variety of editing positions, including executive business editor and special projects editor. He was the primary editor on the 1992 Pulitzer Prize-winning series, "The Monkey Wars" by Deborah Blum, which dealt with opposition to research on primates. Jensen served as a press aide in the 1974 campaign and first administration of Gov. Jerry Brown. (Time served: two years and one week.) He writes from his sailboat on the west coast of Mexico with occasional visits to land. Jensen began writing about the stem cell agency in 2005, noting that it is an unprecedented effort that uniquely combines big science, big business, big academia, big politics, religion, ethics and morality as well as life and death. The California Stem Cell Report has been identified as one of the best stem cell sites on the Internet. Its readership includes the media (both mainstream and science), a wide range of academic/research institutions globally, the NIH and California policy makers.